Typically a stock portfolio retains/reinvests profits. It compounds over time and the liquidity rule would look something like this PctAvgDailyTot(20)<5. During time the portfolio holds more and more liquid stocks.

Instead if you want a portfolio to have stocks with constant liquidity. (AvgDailyTot(20)>500000) The profits would be distributed (or used in different portfolios) and the value of the portfolio would stay sort of constant. This is also what you do when you subscribe to a R2G.

If you want to do this in your individual portfolio, then you would have to override the number of stocks you buy at each rebalance and end up with more and more cash in your portfolio.
But this cash has an impact on the annualized return and active return calcualtions.

It would be great to have a feature "Portfolio distributes profits" to take this into account.
At each rebalance, the profit would be distributed and the new holdings would add up to the start capital. If at rebalance, there is a loss instead of a profit, then the new holdings would add up to the current value including the loss.

P.S. This would also be quite handy for tracking the real performance of the automatically traded R2Gs in future.
Results: Total score: 17, # of Votes: 5, Average: 3.4
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Requested by: tobiasberr
On date: 03/06/14
Category: Portfolio

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